Hyundai and Kia Unit Settles U.S. Charges It Repossessed Service Members’ Vehicles
The recent settlement between Hyundai Capital America and its subsidiary, Kia Motors Finance, with the U.S. government over allegations of wrongfully repossessing vehicles owned by active-duty service members has raised concerns among consumers and highlighted the importance of protecting the rights of those serving in the military. The consent order reached with the Department of Justice and the Office of the Comptroller of the Currency requires Hyundai and Kia to pay $4.15 million in compensation to the affected service members and to take measures to prevent such incidents from happening in the future.
The case against Hyundai and Kia stemmed from violations of the Servicemembers Civil Relief Act (SCRA), a federal law that provides certain protections to military service members. Under the SCRA, lenders are prohibited from repossessing the vehicles of active-duty service members without a court order, unless the service member provides written consent. However, an investigation revealed that Hyundai and Kia had repossessed vehicles belonging to service members without obtaining the required court orders or written consent, in violation of the law.
The settlement serves as a reminder of the importance of complying with federal laws that protect the rights of service members. Active-duty military personnel face unique challenges, including the possibility of sudden relocations or deployments, and it is crucial that they are not unduly burdened by financial or legal issues while serving their country. The SCRA was enacted to ensure that service members are not unfairly targeted by creditors or subject to certain civil obligations while on active duty.
Hyundai and Kia have agreed to compensate the affected service members and to improve their SCRA compliance program to prevent future violations. This includes enhancing employee training on the rights of service members under the SCRA, implementing stronger compliance monitoring procedures, and appointing a dedicated SCRA compliance officer to oversee the process. By taking these steps, Hyundai and Kia aim to demonstrate their commitment to upholding the rights of military service members and to avoid similar issues in the future.
In conclusion, the settlement between Hyundai Capital America, Kia Motors Finance, and the U.S. government serves as a cautionary tale for lenders and underscores the importance of adhering to federal laws that protect the rights of active-duty service members. It is imperative that financial institutions and creditors respect the legal rights of service members under the SCRA and take proactive measures to ensure compliance. By holding companies accountable for violations and requiring them to implement corrective actions, the government sends a clear message that any disregard for the rights of military members will not be tolerated. It is a step towards ensuring that service members are treated fairly and with the dignity they deserve while serving their country.
